Advertising

Great article in BusinessWeek about Chipotle's success without traditional advertising. If you've never been to one, Chipotle's is a burrito place. They used to be owned by McDonald's but got spun out and went public in 2006. Since then their share price has tripled. They've experienced double-digit growth for nine straight years! Here is the kicker: they don't do traditional advertising.

Actually, they do a little traditional advertising. Some billboards (see image with this post) and radio, but they spend less than 1% of their revenue on advertising compared with 4% or more for McDonald's and Taco Bell.

According to Steven Ellis, the Chipotle founder and CEO, "Advertising is not believable." When he opened his first store in Denver he had no money for advertising so he decided to let his burritos do the talking and started giving them away free. They recently opened a location in midtown Manhattan and gave away 6,000 burritos. People stood in line for two hours. It cost $35,000 (about the cost of an ad in The New York Times) and they got 6,000 promoters plus a mention in BusinessWeek out of it. Not bad.

What are you doing to get your customers talking?

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The Happiest customers tell on average 8 other people. Who are your happiest customers? Promoterz knows. Learn more

About six months ago I wrote about a small, bricks and mortar business that had successfully implemented and was enjoying the fruits of an online system that increased word-of-mouth marketing for their business. You can read the original post here. In a nutshell, the business is a haircut salon for men--a Sportclips franchise to be exact. The owners, Chuck and Joan Matheny, were using Promoterz to 1) Collect feedback from their customers, 2) Establish an "opt-in" email relationship through which they could communicate directly with their customers, and 3) Give their customers an easy way to tell their friends about their store. Top line result: more than a 20% increase in revenue.

Here is a new chapter in their saga:

Corporate SportClips introduced and has been encouraging franchisees to promote a "Season Ticket" concept. Customers willing to pay for six haircuts in advance get a free upgrade to MVP service on each of those haircuts (MVP includes a hot towel and shoulder massage among other things). Because several hundred of the Matheny's customers have asked to receive updates about the store by email, promoting the Season Ticket with an email seemed like a natural. Think about the value of Chuck's email list: because he had reached out to his customers and provided a way for them to opt-in, he could now communicate with those that wanted to hear from him directly and at absolutely no cost. He didn't have to wait for them to come into the store or pay for an expensive ad.

Rather than just encouraging the customers to come in to a store and ask for a Season Pass, we decided to put the technology to the test and offer the customers a quick and simple way to buy the card directly online. The email included a "one-click" buy button. Customers could opt to have the card mailed to them or come into the store and pick it up. The test has been a great success. Several customers have purchased online and the orders continue to come in. Cha-ching! A new online revenue stream for a bricks and mortar business.

Small test--significant implications. Here is a small "old industry/bricks and mortar" business that has figured out a way to use the internet--not as a glorified yellow-pages ad, but as a tool to generate new revenue streams, increase repeat customer visits and collect new leads--all of which have a direct impact on the top and bottom lines.

The real "no-brainer?" The Matheny's used Promoterz to do all of this. The cost: $50 per month per store.

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Unhappy customers tell on average 22 other people. If you ticket price is $50 that is $1100 in revenue. How would you like to know before they tell 22 others? Learn more

Realtors are notorious for their creative use of marketing terms. "Open floor plan" means there are holes in a few walls etc. Here are a few more creatively used terms. But this morning as I was out running I noticed this real estate sign. Maybe this guy just ran out of "I'm gorgeous inside" signs and it was the end of a long day so he sighed and went with the "A Nice Place" placard. Whatever it was, it was simple enough to get my attention.

Simple and honest are remarkable. You could argue that "A Nice Place" is still stretching the truth. Wonder how many calls this sign would bring...

Received a little red book in the mail from Target today. It was a flipbook full of coupons. Once I showed my two young children (3 and 5) they had lot's of fun with it. Will we use the coupons? Hard to say, but they are certainly getting more attention and will have a longer lifespan in our house than a typical stack of coupons. You can watch the show here:

Kudos to Target for trying something fun and new. Now to figure out a way to tear out a coupon without destroying the show.

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If you are not regularly staying in touch with your customers someone else will. How do you stay in touch? Learn more

Reena Jana of Business Week writes about Guerilla advertising-- a "catch-all phrase for nontraditional advertising campaigns that take the form of theatrically staged public scenes or events, often carried out without city permits or advance public hype"--and notes that as more and more companies attempt them, the effectiveness of the ads may be decreasing.

Just more evidence of the chaotic marketplace in which we live and consumers' increasing ability to ignore all types of advertising. Adam Salacuse, CEO of a Boston ad agency gets it right:

The focus needs to be on quality of consumer engagement.

The best way to cut through the chaos is to take care of your customers and turn them into promoters.

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Unhappy customers tell on average 22 other people. If you ticket price is $50 that is $1100 in revenue. How would you like to know before they tell 22 others? Learn more

We search the business blog world looking for posts that illustrate principles, or "Seeds", that if followed, or "planted", will help small businesses grow. We list them here for your convenience. Enjoy.